Although Berlin Packaging cannot control the price of raw materials, we do offer multiple value-added services and income-boosting solutions to help our customers Package More Profit. Over the past few years, Berlin Packaging has added more than $200 million in profit to our customers as a unique benefit of doing business with us.

As we ring in the New Year, the K-shaped economy signals both growth and adversity, depending on where you are on the income scale. Affluent and higher-income consumers (the K’s upstroke) continue to expand their wealth through wage gains, assets, and a strong stock market, while lower- and middle-class consumers (the K’s downstroke) struggle with steep prices, job insecurity, and meager wage growth.

After a six-week U.S. government shutdown, some economic data are starting to trickle in. As we review these early numbers, here's a snapshot of the most recent economic activity and news influencing the consumer packaged goods (CPG) market and the packaging industry in North America.

• Holiday shopping reignites consumer spending in November, with record turnout and sales.
• The U.S. Fed cut interest rates by 0.25% in December, marking the third consecutive monthly rate decrease.
• Employment is cooling, while inflation stays warm.

Holiday Shopping Boosts Consumer Spending

U.S. consumer spending and retail sales were flat MOM in October, following a 0.1% increase in September. The data suggest consumers pulled back on spending in October due to higher prices for groceries, housing, and transportation.

In Canada, consumer spending and retail sales decreased by -0.7% in September, according to data from Statistics Canada. The decline was broad-based, with sales falling in six of nine subsectors. Retail sales increased by 0.2% in the third quarter, while sales volume dropped by -0.3%. Statistics Canada projects retail sales will be flat in October.

U.S. spending appears to have rebounded in November thanks to record holiday shopper participation and sales. According to the National Retail Federation (NRF), a record 202.9 million Americans shopped during the five-day holiday weekend from Thanksgiving Day through Cyber Monday. This figure is up from 197 million shoppers last year and surpasses the previous record of 200.4 million set in 2023.

Defining the holiday season from November 1 through December 31, the NRF forecasts that holiday spending will surpass $1 trillion for the first time, with growth between 3.7% and 4.2% over 2024.

Online holiday sales for Cyber Week (Thanksgiving through Cyber Monday) totaled $44.2 billion (up 7.7% YOY), bolstered by record spending during Black Friday ($11.8 billion, up 9.1% YOY), according to data from Adobe Analytics. For the second year in a row, Black Friday growth outpaced Cyber Monday growth (up 6.3% YOY). However, Cyber Monday remains the biggest online shopping day of all time ($14.25 billion).

Generative AI-powered chat services and browsers are making inroads into the online shopping experience. On Cyber Monday, AI traffic to U.S. retail sites (measured by shoppers clicking on a link) increased by 670%, reports Adobe. From November 1 through December 1, AI traffic increased 760%.

Social media is also making gains, with its share of revenue coming in at 3.6% on Cyber Monday, up a whopping 56.5% YOY, according to Adobe. While major channels such as paid search and email continue to be consistent drivers of online traffic and sales, consumers are increasingly turning to social media to discover and learn about new products.

After a strong Cyber Week showing, Adobe expects the full 2025 holiday season (November 1 to December 31) to hit $253.4 billion in online sales, up 5.3% YOY.

Berlin Packaging's mission is to improve our customers' net income through our packaging products and services. We help to increase their sales, reduce costs, and/or improve productivity. Along with having a positive impact on their income, we are committed to providing accurate and timely information and products.

Job Market Concerns Spur Interest Rate Cuts

The U.S. Federal Reserve has a dual mandate: maximizing employment while keeping inflation low. To tame down inflation to its 2% annual target, the Fed can raise interest rates to cool down the economy, encouraging saving over spending, which reduces demand and price pressure. To maintain a strong job market, the Fed can lower interest rates to stimulate the economy and job growth.

So, there's the rub. Lowering inflation may weaken the job market, while revving up the economy can add to inflation. "There is no risk-free path for policy as we navigate the tension between our employment and inflation goals," declared Federal Reserve Chair Jerome Powell.

Evidently, the U.S. central bank is more concerned about a weak labor market than tariff-fueled inflation. At its recent December meeting, the Fed cut interest rates by -0.25% to bring its fed funds rate down to the 3.5%–3.75% range. December marked the third consecutive month with a quarter-point rate reduction.

In Canada, the Bank of Canada reduced its benchmark interest rate by 0.25% to 2.25% in October due to a soft labor market and a weakened economy from trade conflicts.

Employment Cools, Inflation Stays Warm 

The U.S. lost 105,000 jobs in October and added 64,000 jobs in November, according to the latest jobs report from the Bureau of Labor Statistics. The unemployment rate ticked up to 4.6% in November.

U.S.-based employers announced over 70,000 job cuts in November, following more than 150,000 announced job reductions in October, according to outplacement firm Challenger, Gray & Christmas. Through November, employers have announced 1.1 million job cuts, a 54% increase over the same period in 2024 and the highest level since 2020 (pandemic).

Slower job growth and higher unemployment dampen disposable income. Impacted consumers prioritize essentials and value offerings over premium or discretionary CPG products.

In Canada, the November jobs report showed an employment increase of 54,000 jobs, which decreased the unemployment rate to 6.5%, according to Statistics Canada. From September through November, Canada added over 180,000 jobs. The first eight months of the year saw little net employment change.

The U.S. consumer price index (CPI) rose 0.2% over the two months from September 2025 to November 2025, according to the Bureau of Labor Statistics (BLS). The BLS did not collect any data for October due to the government shutdown. On an annual basis, the CPI rose 2.7% for the 12 months ending in November. This figure was down from the 3% annual inflation rate in September.

Economists expressed some doubts about the November CPI report, citing the absence of October information, irregular data collection methodologies, and suspiciously low shelter numbers, which account for over one-third of the CPI.

Over the past 12 months ending in November 2025, the CPI increased 4.2% for energy, 3.3% for medical care, 3% for shelter, 2.6% for food, 1.9% for alcoholic beverages, 0.9% for cleaning products, 0.7% for personal care products, and 0.3% for pet food and treats.

Canada's CPI rose to 2.2% on a YOY basis in November, matching the October YOY increase, according to Statistics Canada. Prices for food purchased from grocery stores rose 4.7% YOY in November after increasing 3.4% in October. The November increase was the largest jump since December 2023.

For CPG brand owners, the CPI data point to a nuanced operating environment in early 2026, characterized by moderating headline inflation but renewed category-level cost pressure, particularly in food and energy-intensive supply chains. Competing effectively will require price discipline, value messaging, and affordable options.

As the world's largest Hybrid Packaging Supplier, Berlin Packaging continually tracks consumer behavior, product trends, macroeconomics, geopolitical events, global trade policies, and packaging innovation to fully understand what is happening in the market so we can best help our customers succeed.

Entering 2026, ocean freight markets are shifting from tariff-driven volume spikes to seasonal demand softness, with declining import volumes, blanked sailings to tighten capacity, and continued geopolitical and operational volatility.

Following persistent frontloading of orders last year to beat the price increase of goods associated with tariffs, imports at major U.S. container ports are expected to decline nearly 12% YOY in the first quarter of 2026, according to data from the National Retail Federation (NRF) and Hackett Associates.

NRF predicts import cargo volumes will decline 10.3% YOY in January, decrease 8.5% YOY in February, fall 16.8% YOY in March, and decrease 10.9% YOY in April. In addition, due to seasonal demand and ongoing uncertainty over tariffs, NRF forecasts YOY import volume declines for November 2025 (-11.6%) and December 2025 (-12.7%).

"We are seeing the results of the tariffs in weakening cargo demand going forward from the fourth quarter of 2025 and likely into the first half of 2026," stated Ben Hackett, Founder of Hackett Associates. "Container shipping rates are already declining on both coasts due to less need for cargo space for goods from both Asia and Europe."

Ocean carrier schedule reliability declined 3.5% MOM in October, only the second major decline in 2025, according to data from Sea-Intelligence. The retreat comes after three consecutive months of stable global schedule reliability. On a YOY basis, schedule reliability was up 11.1%. The average delay for late vessel arrivals increased slightly MOM to 4.98 days. However, on a YOY level, the October 2025 figure was -0.87 days lower.

As volatility persists in many global trade lanes, Berlin Packaging proactively provides alternate routings and real-time visibility of the international freight market to help our customers minimize any disruptions to their supply chains. Our long-standing carrier partnerships with dynamic pricing and adaptable agreements mitigate market fluctuations.

Lunar New Year Holiday Interruptions

While the Lunar New Year Holiday, celebrated in China and other Asian countries, will take place from February 17 to 23 this year, the celebration will impact manufacturing and shipping several weeks before and after the holiday. To avoid supply chain disruptions, shippers and importers should plan for the temporary production and transportation stoppages.

According to Freightos, Asian factory production begins to slow down as early as mid-January. In late January, production winds down. This is also the peak rush of export shipments at major Chinese ports. Spot rates will likely rise as capacity becomes constrained. 

In early to mid-February, workers begin to head home for the holidays, and port operations dwindle. Everything is basically at a standstill during the holiday week. Operations are unlikely to return to normal until mid-to-late March as workers gradually return to factories, transportation carriers, and ports.

Port Activity

U.S. container volumes softened in November 2025, with throughput across the top 10 ports declining 5.4% MOM, according to Descartes. The pullback was broad-based. The port of Los Angeles recorded the steepest contraction, down 9.6%, followed closely by Long Beach at 7.9% and Houston at 10%. Oakland also posted a sharp drop of 11.5%, while Charleston, Tacoma, New York/Newark, Norfolk, and Savannah each saw more modest declines. Overall, the downturn aligns with the expected seasonal lull.

In November, West Coast ports continued to command the largest share of U.S. containerized imports at 42.6%, despite a slight dip from 44.2% in October, extending their lead that began in June. East and Gulf Coast ports edged higher to 41.1% of total volumes. Collectively, the top 10 ports handled 83.8% of U.S. containerized imports. Taken together, coast-to-coast volume shares remain well within their typical annual range, underscoring a steady and balanced national distribution of import flows despite seasonal headwinds.

Air Cargo Growth

While ocean freight dominates global trade by volume (~90%), air freight (<1% of volume) accounts for over 30% of global trade by value. Because of its speed, air freight is favored for time-sensitive products, electronics, pharmaceuticals, luxury goods, critical manufacturing components, and high-value perishables.

Global air cargo volumes are expected to increase by 2.6% YOY in 2026, following a projected volume increase of 3.1% YOY in 2025, according to the International Air Transport Association (IATA). Cargo revenues are projected to rise to $158 billion, a 2.1% increase over the $155 billion projected for 2025. 

However, the 2026 global growth is uneven, with Asia-Pacific volumes increasing 6% YOY, other regions (i.e., Europe, Latin America, and Africa) rising 2% YOY, the Middle East stagnating, and North America declining by -0.5% YOY. 

"The resilience in air cargo has been particularly impressive," declared Willie Walsh, IATA’s Director General. "As trade flows adapt to a protectionist U.S. tariff regime, air cargo has been the hero of global trade, buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI investments. Notably, air cargo enabled frontloading to deliver products ahead of tariff deadlines, and it flexibly accommodated demand surges as tariffed goods normally destined for the U.S. found new markets."

As a Customs-Trade Partnership Against Terrorism (C-TPAT) certified importer, Berlin Packaging and our customers reap multiple benefits, such as reductions in customs freight examinations, "front of the line" status during inspections/exams, and streamlined processes to prevent delays.

After the freight recession of 2025, the road ahead in 2026 looks steadier but hardly smooth. While modest volume growth is on the horizon, carriers are bracing for rising costs across the board, including insurance, labor, equipment, fuel, compliance, and tariffs.

Transportation costs in North America are expected to rise by low-to-mid single digits this year, with pockets of higher inflation, such as urban last-mile, high-toll corridors, and specialty freight.

As the year unfolds, demand and capacity could finally start to rebalance, shifting leverage back toward carriers. That change may strengthen their pricing power and, in turn, put added pressure on shippers’ operating costs.

A potential railroad merger, which would create the first coast-to-coast freight railroad in the U.S., may alter pricing and operations throughout the supply chain, impacting intermodal, trucking, and port activities. For example, the new transcontinental rail network could benefit West Coast ports by giving them a land bridge to Eastern markets.

In Q4 2025, transportation costs crept upward amid firmer demand and tighter capacity. Historically, the post-Thanksgiving through the first week of January period sees key metrics spiking, which then drop sharply back to seasonal levels in Q1.

The November Logistics Managers' Index report revealed pricing gains for inventory, warehousing, and transportation costs. The price jump for transportation was the highest rate of increase since February. A decline in transportation capacity helped push November rates higher. Supply chain experts expect transportation costs to climb over the next 12 months, a trend that could squeeze shippers’ budgets.  

Berlin Packaging's Logistics Team bridges the gap between sales, procurement, suppliers, and operations, ensuring seamless shipment execution tailored to customer needs.

Freight Railroad Merger

In November 2025, shareholders of both Union Pacific (UP) and Norfolk Southern (NS) overwhelmingly ratified the $85 billion merger of the two railroads. If approved by the U.S. government, the merger would create the first transcontinental freight railroad in America.

Supporters of the merger argue that the consolidation will create seamless service from coast to coast, with fewer interchanges between carriers. UP and NS contend the simpler routings will cut transit times, reduce delays, ease congestion, and make rail more competitive with trucking, particularly for long-haul freight. Eliminating interchange handoffs may lower operating costs and increase reliability, especially for time-sensitive freight.

Opponents argue the merger will lead to fewer choices, higher freight rates and fees, service disruptions, and reduced economic competitiveness (the merged railroad will control 40–45% of freight rail traffic in the U.S.). Some critics fear the large rail network will prioritize high-margin traffic, leaving smaller shippers and rural markets with poorer, less reliable service.

Modest Increases for Truckload Rates & Shipments

C.H. Robinson, a global third-party logistics provider, forecasts dry van truckload rates per mile to rise by 4% in 2026. While freight volumes are not expected to increase materially this year due to subdued consumer spending and weak manufacturing activity, cost and regulatory pressures on carriers, such as heightened enforcement of truck driver eligibility, will sustain rate increases.

Several factors could push spot rates even higher this year. They include capacity rationalization (more trucking firms exiting the market), increased consumer spending, and a housing/construction rebound.

Van load-to-truck ratios offer a quick pulse check on the freight market, showing how many loads are waiting to move versus how many trucks are available to haul them. With many trucking companies exiting the market over the past year due to the prolonged freight recession, ratios rose in 2025 compared to the past two years. Climbing ratios indicate capacity limitations and possible line-haul rate increases for shippers like Berlin Packaging.

Diesel Fuel Price Swings

In Q4 2025, U.S. diesel fuel prices rode a wild rollercoaster of fluctuations. Prices fell in October amid higher supplies and then rose sharply in November as inventories tightened. A weekly November price of $3.86 per gallon marked the highest level in 16 months. In early to mid-December, diesel fuel prices retreated abruptly and hovered around $3.60 per gallon—an 11-cent increase compared to one year ago. The December pullback was the largest weekly price drop in two years.

According to the U.S. Energy Information Administration, retail diesel prices are forecast to decline 4% this year on expectations of lower crude oil prices. However, several factors, including geopolitical events, crude oil supplies, refinery maintenance, production interruptions, and weather, can impact diesel fuel supplies and prices. For example, an unusually frigid winter can spike demand for heating oil and distillate fuels, squeezing supplies of diesel fuel.

Strong local carrier partnerships enable Berlin Packaging to provide top-tier service and competitive costs for our customers.